The prospects for an increase in the availability of the container shipping capacity as a result of the resumption of traffic through the Suez Canal became more distant over the past forty-eight hours. Despite earlier statements about halting attacks on shipping, the Houthi movement in north Yemen has continued to threaten vessels passing in and around the Red Sea and the Gulf of Yemen. This prompted a renewed attack by the US. In a statement issued on 17th March, the American Department of Defense stated that “U.S. Central Command forces initiated a series of operations consisting of precision strikes against Iran-backed Houthi targets across Yemen to restore freedom of navigation and re-establish American deterrence”. The assaults appeared to have taken the form of bombing and missile attacks on Houthi installations of various types, which the US Department of Defense said included “terrorist training sites, unmanned aerial vehicle infrastructure, weapons manufacturing capabilities and weapons storage facilities”.
In response the Houthis launched desultory attacks on US naval forces and issued a statement clarifying their position. Published through the Houthi press service it said that “following the expiration of the deadline set by the leadership in Sanaa for mediators to pressure the Israeli enemy into allowing humanitarian aid into Gaza—where civilians have been facing an unprecedented humanitarian catastrophe for over 15 months due to the Zionist aggression—the Yemeni Armed Forces announced the resumption of the ban on all Israeli ships”. Over the past several years the Houthi’s definition of “Israeli ships” has been quite broad.
It would appear logical to assume that the problems in the Red Sea are far from resolved. There are suggestions, not least by the American Government, that the Houthi attacks are an expression of Iranian aggression against the US. It is also suggested that the Houthi movement is benefiting from money paid by some ship owners to ensure their vessels pass unhindered.
The implication of the most recent events seems to be that the threat of Houthi attacks will be indefinite, quite possibly resulting in the Suez Canal being unusable for major container shipping traffic for the rest of this year. In a container shipping market characterised by falling freight-rates this offers some support for prices. However, it seems to imply that uncertainty over the condition of an important aspect of the container shipping market will continue over the long-term.
Author: Thomas Cullen
Source: Ti Insight
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